Letter from the Management Board | About This Report | Sustainability Management | Corporate Governance | Corporate Bodies and Management | Report of the Supervisory Board | Creating Added Value at ALTANA | Group Management Report | Products | Safety and Health | Environment | Human Resources | Social Commitment | Consolidated Financial Statements (condensed version) | Multi-Year Overview | Global Compact: Communication on Progress (COP) | ALTANA worldwide | List of Full Ownership | Overview - About This Report | Contact
Good corporate governance is a basis for the sustainable success of ALTANA. Even as a company not listed on the stock exchange, ALTANA orients itself to the rules of the German Corporate Governance Code.
At least once a year, the Supervisory and Management Boards deal with the regulations of the German Corporate Governance Code and examine which recommendations and suggestions ALTANA can follow even as a company not listed on the stock exchange and sensibly apply within the company given its shareholder structure.
ALTANA follows, or will follow, the vast majority of the applicable recommendations of the German Corporate Governance Code in the current version of February 7, 2017. This especially applies to the recommendations regarding the cooperation between the Management Board and the Supervisory Board, the cooperation between the Chairman of the Supervisory Board and the Supervisory Board plenum, dealings with conflicts of interest of the Supervisory Board members, the setting up and composition of the committees, as well as matters relating to the audit.
Management and Control
The Management Board of ALTANA AG consists of three members, who are appointed by the Supervisory Board for a period of five years. The selection criteria include experience, business and professional expertise, as well as competence in ecology and social responsibility. Considerations regarding diversity also play a role in the selection process. The Management Board members manage the Group independently and are solely committed to the interests of the company. Together with the presidents of the divisions and selected heads of central functional areas, the Management Board forms the Executive Management Team. In regular meetings, this team discusses and analyzes the development of business and important business incidents, as well as plans for the Group’s future development and sustainability issues.
The company’s Supervisory Board has twelve members. Half of them are employee representatives, elected by Group employees in Germany in accordance with the German Codetermination Act. The remaining six members are elected by the Annual General Meeting. Experience and expertise, as well as independence, are also important criteria in the selection of the members of the Supervisory Board. They are normally elected for a period of five years. The Management Board reports to the Supervisory Board regularly, without delay, and comprehensively on all issues relevant for the company regarding business development, risks, and planning, and discusses ALTANA’s strategy with the Supervisory Board. Sustainability issues are also discussed regularly at the Supervisory Board meetings. The Supervisory Board monitors and advises the Management Board in its management activities. The Supervisory Board’s tasks also include approving the annual financial statements. Specially defined business decisions of the company, such as major acquisitions and divestments, require the approval of the Supervisory Board, in accordance with a list of transactions that are subject to authorization.
The Supervisory Board formed an Audit Committee, a Human Resources Committee, and a Mediation Committee, legally required in accordance with section 27 (3) of the German Codetermination Act. Each committee consists of two shareholder representatives and two employee representatives. The Chairman of the Human Resources Committee and the Mediation Committee is the Chairman of the Supervisory Board, Dr. Klaus-Jürgen Schmieder. Since the Annual General Meeting on March 15, 2018, Dr. Jens Schulte has been the chairman of the Audit Committee. He has the necessary knowledge and expertise in the fields of accounting and auditing in accordance with the German Stock Corporation Act.
There is a D&O liability insurance scheme for members of the Management and Supervisory Boards. The insurance covers personal liability risks in the event that a claim is made against members of the Management and Supervisory Boards while they are performing their activities. The insurance contract stipulates a deductible of ten percent of the damages, but a maximum of one-and-a-half times the amount of the fixed annual compensation of the respective member of the Management or Supervisory Board per insurance year. Further information on the compensation of the Management and Supervisory Boards can be found on page 72f. of the Consolidated Financial Statements.
The trust of our business partners and customers, as well as the public, in the lawful and responsible behavior of the ALTANA Group and its employees is decisive for the success and reputation of the company. Compliance is therefore extremely important for ALTANA.
Since 2008, ALTANA has had a so-called Compliance Management System (CMS). It aims to ensure that its companies abide by the laws, regulations, and internal company rules the non-observance of which can pose considerable risks for the company. The objective of the CMS is therefore to identify the primary risks that can arise through violations of laws and rules, to ensure that the employees are trained regarding the content and meaning of the relevant laws and regulations, and to assure that measures are taken to prevent infringements of laws and internal regulations.
Furthermore, the CMS aims to ensure that the necessary control mechanisms are implemented so that violations of laws and rules can be detected and terminated. The CMS encompasses nine compliance areas, including corruption, antitrust law, environmental protection and safety, human resources, customs and foreign trade, data protection, financial reporting, as well as taxes.
The ALTANA CMS follows the ALTANA structure and is therefore decentralized. The local managing directors and the local management are primarily responsible for making sure that the individual subsidiaries and their employees behave in accordance with the rules. ALTANA AG lives up to its responsibility of ensuring compliance by providing a framework, making competencies and tools available, creating platforms and forums for local authorities, and by taking concrete measures to ensure compliance on the part of the management of subsidiaries or to impose minimum requirements, especially through guidelines that are binding Group-wide.
ALTANA’s Code of Conduct, which holds for the entire company, contains binding rules regarding responsible, ethical, and lawful behavior for all staff members. This applies in particular to issues such as corruption, conflicts of interest, antitrust law, environmental protection, and discrimination. Together with the company’s Guiding Principles, the Code of Conduct provides orientation for responsible corporate action. The Code of Conduct and the Guiding Principles are published on our website. Since 2010, ALTANA’s employees have been trained with the help of an e-learning program regarding the content of the Code of Conduct and further issues relevant to compliance such as corruption and bribery, as well as competition law issues. In 2018, around 4,200 employees completed the Code of Conduct training program.
Moreover, for each compliance area further specific measures have been developed and implemented to ensure that laws and internal regulations are adhered to. This includes, for example, an IT-assisted system with whose help business partners that support ALTANA AG and its subsidiaries in sales or in their cooperation are examined for potential compliance risks.
Another important element to guarantee the effectiveness of the CMS is the work of Internal Audit. For a few years now, compliance programs have been carried out regularly at ALTANA and its subsidiaries.
With the ALTANA Compliance Hotline, ALTANA provides another central means of ensuring compliance. The latter gives employees as well as external third parties the possibility of reporting illegal behavior, if need be, anonymously.
Once a year, the Audit Committee receives a written report on compliance that is presented and discussed in a meeting of the committee in addition to the other proceedings. The report gives an overview of the risks identified for each compliance area, as well as already implemented or planned measures to advance the system. The Audit Committee is also informed about compliance violations.
ALTANA joined the UN Global Compact initiative, whose members are voluntarily committed to adhering to social and environmental standards as well as the protection of human rights. By joining Global Compact, ALTANA has not only acknowledged its principles but also shown a general commitment to support and promote overall UN aims.